Personal Care Agreement Guide for Families

A personal care agreement is a written document that says who pays what, who does hands-on care, and what happens when things change. Sometimes called a caregiver contract or family care agreement.

Why Your Family Needs One

Verbal agreements between siblings break down. Not because anyone's lying, but memories differ and stress warps perception. Writing it down prevents the usual fights:

• "I thought we agreed to split it equally." A written record settles that.
• "Nobody told me costs went up." Built-in review periods force updates.
• "I'm doing all the work and nobody cares." Documented caregiving credits put a number on it.
• "What about Medicaid?" A documented agreement helps show that caregiver payments are compensation, not gifts. That matters for Medicaid planning.

What a Good Agreement Includes

Here's what should be in it:

1. Financial Breakdown

A table showing each sibling's income share, gross contribution, caregiving credits, and net amount due. Include the method you used (income-proportional, equal, or hybrid).

2. Payment Schedule

When are payments due? 1st of the month? 15th? Grace period? Who collects? Be specific. Vagueness is what causes late payments and awkward texts.

3. Caregiving Time Credits

Specify the hourly rate, what counts as caregiving, and how hours get tracked.

4. Review and Adjustment Period

Things change. Build in a review every 3, 6, or 12 months. Also specify what triggers an early review: parent's health changes, someone loses a job, care costs jump.

5. Parent's Assets

Clarify whether the parent's own money (savings, Social Security, pension, LTC insurance) gets used first, with siblings covering the rest. Matters for fairness and Medicaid planning both.

6. Dispute Resolution

Agree on a process before the conflict happens. Family mediator, elder law attorney, geriatric care manager. Pick one now so you're not scrambling later.

Should You Have an Attorney Review It?

It doesn't have to be a legal document to be useful. Just writing things down helps. But if there are significant assets, a possible Medicaid application, or complicated family dynamics, get an elder law attorney to review it.

Especially important if a sibling is getting paid for caregiving. The IRS and Medicaid both have specific rules around that.